HEG margin to remain under pressure for next 2-3 quarters, says Executive Director
As HEG navigates the complex currents of the market, one thing is certain, the company's strategic vision, under the leadership of Manish Gulati, continues to guide its evolution, positioning it for sustained success in the years to come.
In an exclusive interview with CNBC-TV18, Manish Gulati, the Executive Director of HEG, shared insights into the company's near-term outlook, speaking about the anticipated shifts in margin dynamics and the strategic expansion of manufacturing capacities. The interview provided a comprehensive overview of HEG's strategic initiatives and future growth prospects.
Gulati revealed that HEG is bracing for a period of margin pressure over the next the two-three quarters. This projection is grounded in a thorough analysis of market trends, demand fluctuations, and cost dynamics. The intricate interplay of these factors, he noted, is likely to exert downward pressure on margins.
However, the silver lining lies in the potential for a margin rebound starting from the fourth quarter. This projection reflects the company's confidence in its ability to navigate the evolving market landscape and effectively manage operational efficiency.
“Going forward, margin is going to come under pressure for next two-three quarters. You will see it sequentially going down from quarter one to quarter two, to quarter three and maybe in quarter four it picks up,” he said.
A pivotal development on HEG's horizon is the imminent activation of new manufacturing capacities. Gulati shared that these enhanced capacities are slated to become operational by October or November.
This strategic move is poised to catalyse HEG's growth trajectory, positioning the company to capitalise on emerging market opportunities. By increasing production capabilities, HEG aims to not only meet existing demand but also tap into new avenues for revenue generation.
Among the key highlights of HEG's forward-looking strategy is the establishment of Li-Ion cell manufacturing capabilities. Gulati emphasised that the groundwork for this ambitious endeavour is already in place. He noted that HEG's foray into Li-Ion cell manufacturing is projected to start yielding revenues from the second half of the fiscal year 2025. This strategic move positions HEG at the forefront of a rapidly evolving industry, showcasing the company's adaptability and commitment to innovation.
Manish Gulati's insights underscore HEG's proactive approach to the dynamic business environment. While acknowledging the short-term challenges in margin dynamics, the company remains steadfast in its pursuit of long-term growth. The upcoming activation of new capacities and the strategic bet on Li-Ion cell manufacturing exemplify HEG's commitment to innovation, diversification, and staying ahead of market trends.
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First Published: Aug 14, 2023 3:28 PM IST
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